Caps on the maximum height of buildings in towns and cities will be lifted by the end of the month.

Housing Minister Eoghan Murphy told a housing conference the changes would help make better use of land and prevent continued urban sprawl.

Last summer, the Department of Housing issued draft guidelines which suggested the 'default' building height in the core centres of cities and towns should be six storeys. The regulations would also lift the cap on maximum heights to allow high-density development to take place where planners deem it to be appropriate.

The minister said there was no point in building 200 homes on a site in an area of high demand, when 400 could be provided under the new rules.

"It's quite a dramatic change," he told the Housing Agency annual conference. "The existing laws haven't served us well. We will be able to make dramatic change as we need to maximise sites. We need to ensure we're pushing growth in our cities."

Mr Murphy also said that to protect against future shocks in the housing market, the State needed to invest in homes, and spending levels were "moving in the right direction". In addition, he said, supply was coming back on stream and up to 25,000 units could be completed next year.

The conference also heard from Sherry Fitzgerald chief economist Marian Finnegan, who said while house prices would continue to increase, albeit by 3pc or 4pc a year, they could fall by the end of the year as available mortgage rule exemptions ran out.

But she said that did not imply consumers would "rush" to buy a home on the basis of lower prices, as they were slower and more careful about making decisions around house purchases.

Separately Housing Agency chief executive John O'Connor said there were "huge difficulties" in the rental sector which needed to be addressed. His comments came as a survey of 1,400 people carried out by the agency found two-thirds of renters had difficulty paying for their housing needs; renters were more likely to live in overcrowded accommodation than owner-occupiers and also experienced difficulties in heating their home.